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GTN vs. NFLX: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of Gray Television (GTN - Free Report) and Netflix (NFLX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Gray Television is sporting a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GTN is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

GTN currently has a forward P/E ratio of 5.13, while NFLX has a forward P/E of 33.14. We also note that GTN has a PEG ratio of 0.51. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NFLX currently has a PEG ratio of 1.33.

Another notable valuation metric for GTN is its P/B ratio of 1.23. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NFLX has a P/B of 10.13.

These are just a few of the metrics contributing to GTN's Value grade of A and NFLX's Value grade of C.

GTN sticks out from NFLX in both our Zacks Rank and Style Scores models, so value investors will likely feel that GTN is the better option right now.


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